Three Gorges Probe

Chapter 9 – Missing Energy Perspectives

by Vaclav Smil, Ph.D.

Editors’ Note: As part of China’s strategy to sustain economic growth, CYJV concludes that the Three Gorges Project is China’s best option for alleviating electricity shortages in urban industrial centres as far away as Shanghai, 1100 kilometres downstream of the Three Gorges region. Vaclav Smil presents several key perspectives missing from CYJV’s justification of the Three Gorges Project which explain not only why the project is a poor investment in China’s energy future but also that environmentally and economically sound alternatives exist.

For more than two generations, Chinese and foreign perceptions of the need for the gargantuan Three Gorges Dam have remained surprisingly limited. “It is as if 50 years of technical and financial exploration left little time or energy for more thoughtful consideration of the wider implications for China’s society and economy…questions…tend to be formulated in terms that constrain fruitful discourse on interrelated physical, social, and ecological aspects.”1 The CYJV study is simply the latest narrowly focused contribution to the seemingly interminable debate over the project.

China’s Need for Electricity

All justifications of the Three Gorges Project, including the CYJV study, assume that China needs sustained and substantial increases in electricity generation for a central grid network. They anticipate that the average annual demand for electricity will grow by 8 percent until the year 2000 (doubling in less than 9 years), and by 5 percent during the first decade of the new century (doubling in 14 years). For the areas to be supplied by the Three Gorges Project – Central China, East China, and Eastern Sichuan – demand is expected to increase from 20.6 gigawatts (GW) in 1985 to about 70 GW by the year 2000 and to just over 120 GW in 2010.*

Annual electricity generation growth rates from 7 to 10 percent have been common in countries at comparable stages of economic development; indeed, these high growth rates prevailed even in many richer nations until the early 1970s. In the regions which would be supplied by the Three Gorges Project, the availability of electricity on a per capita basis is only one-sixth to one-quarter that of other developing countries such as Brazil or Mexico, and merely 1 to 2 percent of average per capita energy consumption in Canada or the United States, respectively.2 China’s national newspaper, the People’s Daily,** reported in the late 1980s that China was short 30 terawatt-hours of electricity, equivalent to roughly 40 percent of the expected annual average output from the Three Gorges Project.

At first sight, there appears to be nothing questionable about these figures and they seem to provide the obvious rationale for going ahead with the dam: China is in great need of electricity. But a very different perspective unfolds by looking closely at how and where electricity is currently used. The U.S. Office of Technology Assessment reports that it is the orientation of China’s industry and its inefficient use of energy which are to blame for energy shortages, rather than a lack of energy supply.3

China’s heavy industries, such as iron and steel manufacturing, and chemical processing, consume about 65 percent of the country’s electricity supply. In 1987, China’s steel industry consumed roughly two times more electricity to produce one tonne of steel than western and Japanese steel producers. Similarly, for the production of sulphuric acid (a basic compound for many chemical processes), and ammonia (used to synthesize urea, China’s leading nitrogen fertilizer), Chinese plants consume anywhere from three to six times the amount of electricity used in western countries.4 Combined with China’s generally low efficiencies for fuel combustion and electricity generation, this makes China one of the world’s most energy-intensive economies.

China consumes seven times as much energy as Japan to produce one unit of gross national product (GNP).* Even compared to other poor, populous nations such as India, Indonesia, and Brazil, China’s heavy industry accounts for over half of the country’s GNP,** which is an inordinately high share.5

China’s orientation towards heavy industry means that most of the country’s energy is being wasted. The bulk of China’s heavy industry and technology are of the 1950s vintage and are under the control of cumbersome government bureaucracies. As a result, they are inadequately maintained and operated, and since more than nine-tenths of all electricity is sold by the state at artificially low prices, there is little incentive to upgrade systems and improve their performance. The Three Gorges Project, which is intended to provide more state-subsidized electricity to the inefficient industrial sector, would not eliminate China’s energy shortages, but would perpetuate existing wasteful practices.

Because so much energy is currently wasted in China, the immediate potential for improving and expanding energy services, without building new generating plants (coal, nuclear, hydro), is vast. In fact, the electricity now required by the Chinese economy – 80 percent of which is devoured by the industrial sector – could be delivered using just 60 percent of the country’s existing hydroelectric generating capacity. This amounts to electricity savings of 270 terawatt-hours or nearly four times the output at Three Gorges. Another, more conservative estimate of improvements in industrial energy efficiency over two decades – the time which would be required to put the Three Gorges Project into full operation – amounts to an annual saving of at least 70 terawatt-hours, or the equivalent expected annual output from the Three Gorges Project which could be used elsewhere.

Rather than building the Three Gorges Project, a gradual shift in China’s industrial structure and a widespread improvement in energy use is achievable by a combination of off-the-shelf technologies, improved system management and price reforms. Critics of the Three Gorges Project within China agree that, in an overwhelming number of instances, these changes would be less capital intensive than building new generating plants. Such a strategy would have the added advantage of providing more employment and improving the competitiveness of China’s industries without creating costly environmental impacts, such as those anticipated at Three Gorges.6 In fact, an increasing number of energy experts agree that economic prosperity increases with the greater availability of useful energy services rather than with the greater supply of fuels and electricity used wastefully.

Another energy-saving strategy would be to expand light industries, such as food processing, textile manufacturing and consumer electronics, which would require only one-quarter the amount of energy used by heavy industry7 to produce an equivalent value of industrial output. If light industries increased their share of total industrial output by just 7 percent, 30 terawatt-hours of electricity could be saved each year, or about 40 percent of the expected annual output at Three Gorges.*

China’s Hydroelectricity

China is endowed with the world’s largest untapped hydropower potential and therefore hydroelectricity will undoubtedly play a major role in the nation’s future electricity supplies. Detailed surveys completed in the early 1980s by China’s Ministry of Water Resources and Electric Power show that it would be technically feasible to build 11,103 hydro dams** with a total capacity equivalent to 27 times the planned output from the Three Gorges Project. The Yangtze’s tributaries alone could potentially support 4440 hydroelectric stations with a total installed capacity six times that of the Three Gorges Project.

Since less than 10 percent of this capacity has been tapped, China is in a position to decide prudently – on the basis of social, environmental and economic factors – whether or not to build large dams at all, or small dams.***

Sichuan province, the region which would have to bear most of the burden of resettlement, has about one-quarter of China’s total hydropower potential, and could build a series of 1 to 3 GW power plants instead of the Three Gorges Project. These dams could be built on upper, less densely populated reaches of Yangtze tributaries, in less than half the time required to build the Three Gorges Project, with less social and environmental impacts. The province, and hence the country, would benefit from the new supply much more rapidly, and could rely, to a greater extent, on domestic engineering capability.

Most importantly, the development of hydropower should be undertaken only if the project poses no long-term environmental risks on a scale that is commensurate with the country’s technical and investment capabilities, and only if the project meets the electricity needs of China’s predominantly rural population.

Rural Energy Crisis

The Three Gorges Project is part of China’s energy policy which stresses large centralized energy supply projects for electricity generation. Such investments neglect the basic energy needs of nearly three-quarters of China’s population living in villages and small towns. Almost half of the rural population is without electricity; roughly half of rural households experience severe shortages of biomass fuel (straw, wood, shrubs, and grasses) for everyday cooking.*

To date, widespread construction of small hydrostations has been the most successful means of expanding China’s rural electricity supply since most of these locales could never be linked to centralized electrical grids from giant dams, such as the proposed Three Gorges Project, because of high cost or difficult access. More than 70,000 rural stations with a total capacity of nearly 10 GW have been installed. More than three-quarters of China’s 2,133 counties have small hydrostations and about one-third of these counties rely on them for most of their electricity.

Although experience has proven that small-scale hydro is not without technical and environmental problems – such as poor design and sizing, unreliable equipment, and excessive sedimentation – these problems are much more easily managed than problems arising from giant projects.

Plant Size

Since the early 1970s all the leading Western economies have come to recognize the perils of large dams. Even in Canada, such giant projects as Phase II of the James Bay Project face increasing opposition because of their inordinate demand for capital and skills, and their almost invariably negative environmental impacts. Above all, they are inherently inflexible: once the project is built, its high cost would render it too expensive not to operate, even when its negative impacts warrant mothballing the project.

Simplistic assessments of the Three Gorges Project as an energy supply option – detached from judging the economic merit of generating more state-subsidized electricity to supply the horribly inefficient industrial sector – may show economic benefits because they fail to account for the long-term impacts ranging from reservoir sedimentation to coastal erosion. Such impacts were anticipated at other large-scale dam projects inside and outside of China, and were judged to be acceptable and manageable in view of the huge benefits expected – but became intractable burdens just a few years or a decade after the dams were built.*

Conclusion

The most effective means of providing energy services for China’s modernization has been obscured by the grandiose ambitions of dam builders in China, Canada, and elsewhere. A rigorous appraisal of alternatives would reveal that a better energy strategy lies in avoiding the inestimable cost of environmental degradation associated with large dams, in less reliance on heavy industry, and in the vigorous promotion of efficiency improvements and conservation measures through technical innovation and price reforms.

To complement these efforts, the development of China’s hydropower should be undertaken only on a scale commensurate with the country’s technical and investment capabilities, without the worrisome long-term environmental risks such as those posed by the Three Gorges Project, and in accordance with the needs of its predominantly rural population.

 

 


Sources and Further Commentary

 

*1 megawatt (MW) = 103 kilowatts
1 gigawatt (GW) = 106 kilowatts
1 terawatt (TW) = 109 kilowatts

**Remrinribao (People’s Daily) is the official newspaper of the Chinese Communist Party.

*Assuming the official exchange rate. If the exchange rate were adjusted according to purchasing power parity, China’s energy consumption per unit of GNP would only be three times as much as Japan. In 1987, Japan’s GNP was $1,760 billion and China’s $350 billion; their energy use was 380 and 580 million tonnes of oil equivalent, respectively.

**Total industrial output accounts for 52 percent of the country’s GNP.

*Assuming all other factors remained equal.

**This figure includes dams with relatively small plants of 500 kilowatt capacity to giant plants with several gigawatt capacity.

***Megaprojects worldwide are known for their huge cost overruns and construction delays. CYJV uses Canadian experiences to estimate what the Three Gorges Project costs would be twenty years from now.

*The World Resources Institute reports that expanding biomass resources is essential for meeting basic energy needs in rural areas. Promoting the efficient use of biomass fuels would also help reduce deforestation, desertification and soil erosion. Modernization of bioenergy would not only help China reduce its reliance on coal but would also generate employment and stimulate domestic technological development.

*For example, rapid sedimentation in the Sanmenxia Dam reservoir on the Yellow River forced a costly reconstruction and downgrading of the dam’s original capacity. Also, the reduced sediment load in the Nile, due to construction of the Aswan Dam, has caused millions of dollars’ worth of downstream channel and coastline degradation.

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